News

USDA Report Shows Little Economic Benefit to COOL

06 May 2015

US - A new USDA report finds some evidence of consumer interest, but negligible economic benefit, to mandatory country-of-origin labelling (COOL).

The report, which was required by the 2014 Farm Bill, provides a comprehensive economic analysis of the rule and concludes that the cost of COOL's labelling requirements outweighs the economic benefits of implementing the rule.

The rule would require meat to be labelled with information on where the livestock was born, raised and slaughtered, and is currently awaiting a final decision by the World Trade Organization (WTO).

If the WTO rules in favour of COOL, Canada and Mexico are expected to seek retaliation against the US by imposing trade sanctions.

In a statement, House Agriculture Chairman Michael Conaway expressed concern about potential trade sanctions resulting from the WTO's ruling.

He said: "In order to avoid what could be devastating retaliatory sanctions against US businesses if we lose, the starting point needs to be that mandatory COOL for meat is a failed experiment which should be repealed."

US National Farmers Union President Roger Johnson said: “The announcement from the WTO on this lawsuit is due in just weeks, and we may win. If not, it can still be brought to arbitration.

“And that’s why it’s important that Congress refrain from making any changes to the popular labelling law until this process has run its course.

“To do otherwise would not only be unprecedented in U.S. history, but would also be a disservice to consumers who support COOL by a margin of 90 percent, according to decade’s worth of polling.”

Mr Johnson said that the food labelling movement is no longer confined to the US, but now includes the European Union as well.

“A few years ago European politicians got an earful when their constituents learned that they were walking around with a stomachful of horsemeat. Meat from horses labelled as beef was being imported into the European Union (EU), and since strict labelling laws were not in place in one of the world’s most lucrative markets, consumers were tricked into eating something very different than they thought,” he said.

Mr Johnson added that the next step in the arbitration process, should the WTO rule against America’s consumers and producers in May, is that Canada and Mexico can retaliate against US.

But the level of retaliation can be subject to arbitration, if requested by the U.S. The level of arbitration is limited to the adverse effects on Canadian and Mexican exports to the US.

“Proving COOL has caused economic harm is going to be no small feat for Canada, given the recent study out of Auburn University that found it was the economic collapse of 2008 – not COOL – that caused a dip in Canadian exports to the US,” he said.

According to Mr Johnson COOL is not only popular with consumers, who like to know where their food comes from, but producers as well.

“The other side of the equation is the perspective of American producers, who strongly support COOL because they are proud of what they produce. After all, we have the most productive and efficient agriculture sector in the world, and it’s producing the safest, most nutritious food available anywhere. Why wouldn’t they want to have their name on the product?”

Mr Johnson said that the WTO is ultimately a political body and the global political environment is clearly shifting towards more information for consumers, not less, so in the end, pressure will mount within the WTO to recognise and accept the rights of consumers to the increased information provided by COOL.